Venture Capitalists Favour Crypto, Cast Doubts on Climate Tech

Venture funds in 2025 are betting on cryptocurrency’s resurgence, but concerns loom over climate tech under potential US policy shifts. With hundreds of millions in capital ready for deployment, investment strategies reveal stark contrasts in optimism for different sectors.

The mixed climate stems from the geopolitical and economic landscape. Concerns revolve around policies potentially hindering renewable energy while favoring cryptocurrencies. Blockchain technology may revive as investor interest grows, but tariffs and anti-climate policies could impact renewable innovations and tech hardware. Australian sectors reliant on global trends could face significant challenges.

While the renewable sector sees uncertainties, artificial intelligence (AI) and vertical SaaS (Software-as-a-Service) opportunities are thriving. Venture funds aim to back start-ups addressing specific industries with tools akin to Shopify's e-commerce solutions or construction-focused checklist software. The focus is also on younger, STEM-trained founders who are entering entrepreneurship earlier than ever, thanks to education programs.

In fintech, valuations show signs of recovery. Payment integrations and digital finance platforms see renewed interest as public markets stabilise. Emerging companies leveraging embedded payments—similar to Stripe or Square—are expected to grow in influence within small businesses and cafes. AI advancements spearhead innovation with opportunities in automation across industries like logistics, insurance, construction and education. Start-ups targeting niche “unsexy” problems through task automation and operational efficiency appear promising. This shift could transform sectors traditionally resistant to digital change, creating markets far exceeding current software revenues.

Although uncertainties persist, burgeoning technologies like AI could reshape business models across healthcare, B2B solutions and robotics. Venture capital firms are ready to embrace this transformative era, positioning their portfolios for the next wave of innovation in 2025.

Source: The Australian, Piper Alderman